Poor man's portions spread to 'rich' west

Mondelez, the global snacks group, is rolling out bite-sized squares of chocolate that cost just 10 cents and single portions of candy across parts of western Europe, as manufacturers downsize for cash-strapped consumers using techniques that are more usually found in emerging markets.

Selling items in single-serving packets - such as sticks of gum, single cigarettes or a scoop of dog food - has been commonplace in markets such as India, the Philippines and Latin America for many years.

But the increasing squeeze on disposable income in the once richer countries of western Europe means more single-serving products are available on the shelves in Spain, Greece, Portugal - and even the likes of the UK, France and Switzerland.

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Mondelez International, formerly part of Kraft Foods, is just one of several companies developing its miniature offerings in western Europe. Unilever, the Anglo-Dutch consumer goods company, sells a box of 40 tea bags for �1 and recently began selling �1 bottles of Dove in Primark. L'Or�al, the cosmetics group, is also considering developing smaller formats.

Manufacturers are designing the packets to be sold at a single price point of �1 or ?1, allowing them to be stocked in pound shops. Like discount retailers, these chains are stealing a march on the big supermarkets as shoppers try to make their squeezed budgets go further.

Premier Foods, the UK-based manufacturer of Mr Kipling cakes and Hovis bread, is increasing its production of smaller-sized formats such as single slices of cakes.

"We know there are opportunities in the market for smaller sizes of our offerings that consumers and retailers would like to have and we are aggressively working on how to catch these opportunities," says Michael Clarke, chief executive.

Mr Clarke, like other manufacturers, is trying to hit the "round �" or similar price point. "Getting to the absolute price point is becoming more important because shoppers are totting up their spend as they go along [the aisles]," he said.

Mondelez says it is expanding its low price point products in Spain and Portugal and plans to make them available in other countries in future. "We are seeing, particularly in southern Europe, increasing opportunity in small pack sizes," said Tim Cofer, who runs Mondelez's European business.

He pointed to increasing sales of two-pellet packs of chewing gum, available in Greece and Spain and beginning to appear in Switzerland.

"That's a format that's been around for some time, but given challenging markets we are seeing growth of that format," he said.

As suggested by manufacturers' willingness to meet the demand for mini-sized products, the smaller servings are good for business. "Although the price point is small, the margin is better [than bigger sizes]," said Andrew Cosgrove, global analyst for consumer products at Ernst & Young.

Nor does it necessarily cannibalise other sales. Two years after Coca-Cola introduced mini cans into the US, it said 71 per cent of volume was additional to existing brand sales.